Gordon Brown to call for international agreement to cut public spending

Gordon Brown, the Prime Minister, will use next week’s G20 meeting in America
to propose an international timetable for governments around the world to
start cutting public spending together.

Mr Brown this week admitted for the first time that Labour would make 'cuts'.Photo: GETTY IMAGES

By Andrew Porter, Political Editor

11:50PM BST 17 Sep 2009

In an article The Daily TelegraphMr Brown says “exit strategies” from the emergency fiscal measures that were introduced to stave off the worst excesses of the recession need to be agreed by all the leading nations.

The Prime Minister will tell world leaders that a “new global compact” is needed to govern how countries run their economies, and achieve and maintain growth.

He also wants the International Monetary Fund to advise countries on their “national plans.”

“So at next week's G20 Summit in Pittsburgh concerted international co-operation is again required," he said, "To this end, I am proposing a new global compact to entrench economic recovery and secure stability, growth and jobs.

“This global compact should be based on a strong political commitment of mutual co-operation and set in place a new era of global economic management.

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“It requires us both to maintain our support to the global economy, including our stimulus programmes this year and next until the recovery is secured, and to plan to co-ordinate exit strategies.”

Mr Brown has previously opposed calls from Germany and France for an "exit strategy" from the current phase of fiscal stimulus packages, warning that it is too soon to start talking about rebalancing budgets by cutting spending and raising taxes.

Mr Brown this week admitted for the first time that Labour would make “cuts". A leaked Treasury document also revealed that plans are in place for cuts of 10 per cent.

Next week’s meeting in Pittsburgh will be the first G20 gathering since some world economies emerged from recession.

Britain’s deficit is noticeably bigger than many of the other leading nations and will require tougher action.

Last night the Conservatives seized on note by Japanese investment bank Nomura which said the prospect of a UK fiscal crisis is “a clear and present danger.”

It claims that the UK is in a far worse place than the US.

George Osborne, the shadow chancellor, said: “This worrying report should be a wake up call. This is not just whether Gordon Brown is telling the truth, this is about maintaining Britain’s international reputation.

“We’ve already had one of the longest recessions of any major economy, and now Labour’s policies risk soaring interest rates, further job losses and choking off the recovery.”